Bally is back: Luxury brand celebrates its stylish TFWA return with confidence and optimism

“Labelux wants to support Bally for long-term growth and we are lucky to enjoy this support. They want to build the brand and we are lucky to be in this position. It’s like a dream for me to be able to see results over the long term“

Marco Franchini
CEO
Bally

SWITZERLAND. Bally is back. That was the message the Swiss luxury brand was eager to convey at the TFWA World Exhibition a fortnight ago, as it unveiled a fresh look for its stand after an absence of several years from the travel retail industry’s premier event. And wow, did it come back in style.

Within the walls of its luxurious yet comfortable suite, the company displayed specially selected accessories in small lifestyle ‘sets’ or clusters, signalling a new lifestyle-led approach to merchandising. And that wasn’t all. Bally’s travel retail customers were whisked off to a secret location overlooking the bay of Cannes, where they could chill out and admire the amazing view. Villa Sacha – recently built by a French supermarket tycoon – was turned into Bally-Central for the week. By all accounts, nobody wanted to leave this very special place.

Not only did Bally celebrate its return to TFWA, it celebrated its return to the forefront of fashion, as the company unleashed the full force of its creativity under new Creative Director Brian Atwood, who was hired in 2007 to rejuvenate and refresh the brand for today’s ultra-competitive modern times.

Even though these times are now hard, as well as competitive, Bally’s CEO Marco Franchini expressed his overt optimism about the future when The Moodie Report sat down with him in the Bally suite in Cannes. The reason for his buoyant mood amid such dire economic circumstances was his new position at the helm of a company in private hands without shareholders to answer to or double-digit quarterly growth targets to meet. Just a few months ago, this wasn’t the case.

Back in April 2008, US private equity firm TPG Capital announced it was to sell the Swiss accessories and ready-to-wear brand to Labelux Group, a private holding company formed by Germany’s billionaire Reimann family. The deal valued Bally at between US$600 and US$700 million, and the buyout was completed during the Summer. But just weeks after the deal was finalised, financial meltdown sent the world economy into a tailspin. While Franchini is concerned about how this turmoil will affect global luxury goods sales, he is luckier than most in not having stringent quarterly profit targets to meet.

Franchini has high hopes that the Labelux group will be good for Bally, one of the oldest companies in the luxury goods industry, founded in 1851 by Carl Franz Bally. “Labelux wants to support Bally for long-term growth and we are lucky to enjoy this support,” Franchini said. “They want to build the brand and we are lucky to be in this position. It’s like a dream for me to be able to see results over the long term.”

Commenting on the deal earlier this year, albeit before the financial crisis struck, Labelux Chief Executive Officer Berndt Hauptkorn observed: “Bally is a brand with wonderful heritage and rich archives, and now it is well-positioned for its next phase of growth.”

Bally has been through some tough times before. TPG acquired Bally in October 1999 for about US$200 million and restructured the loss-making organisation, investing heavily to increase the brand’s visibility in the luxury market. Franchini joined the company during TPG’s ownership in 2002, having spent time at Genny Spa (comprising Genny, Complice and Byblos brands) and multi-brand company Guccio Gucci Spa, where he latterly served as Gucci’s General Manager Europe, one of four regional general managers reporting directly to the Managing Director. In 2004, Bally returned to profit and has maintained double-digit growth rates since, last year recording sales of about US$500 million.

Since Franchini’s arrival as CEO Bally has worked hard to refurbish and recently expand its retail network, now boasting some 730 points of sale worldwide. In 2004, after nearly 16 years of operating in the red, Franchini brought the company to break even, thanks to his commercial nous as an MBA graduate who held the Chief Financial Officer position at Genny spa. All production at Bally was brought back in-house, ensuring that quality was completely controlled. In addition, production “˜centres of excellence’ were developed for the company’s three core product categories: footwear, leathergoods and ready-to-wear.

In early 2007 – to wide acclaim among the fashion fraternity – Franchini appointed Brian Atwood as Creative Director, to move the brand up to the next level. The company believes Atwood’s vision is perfectly in tune with Bally’s luxury products. Then, earlier this year, the company’s self-styled “˜spectacular’ brand turnaround resulted in the Labelux acquisition. Significantly, Bally has now bought back its business in China and Japan, now directly operating these crucial markets.

Franchini has forged a clear strategy since the Labelux acquisition – and it lies with a fresh lifestyle approach. “Our new strategy is to put the brand at the very centre of everything we do. A key change for us is that we are now presenting the complete Bally lifestyle, by having our fashion line, shoes, bags and accessories presented all together,” he said.



Bally hailed its return to the TFWA World Exhibition in Cannes with a luxurious and uber-stylish suite surrounded by specially selected lifestyle product displays and seductive advertising images for Spring/Summer 09

Travel retail strategy

Turning to retail, Bally’s international boutique network is undergoing an extensive refurbishment programme. The key New York flagship renovation has been fully completed, while European stores in Paris and Rome will be a major focus for next year. In the Asian region, the number of shops is growing fast, according to Franchini, who noted that Bally’s Beijing flagship opened just a few weeks ago. The company now has 52 outlets in China and Hong Kong, and 34 in Japan. Other markets that are expanding rapidly include Eastern Europe and the Middle East. In India, where Bally has one store, Franchini has high expectations and is monitoring the market closely.

As travel retail is a global prestige brand showcase, Franchini’s philosophy is to develop this strategic channel of distribution. “Over the last few years Bally has achieved a spectacular turnaround and has enjoyed a marked improvement in performance and an expansion of its consumer base,” he said. “Travel retail has played a key role in this turnaround, today representing 11% of the total business. I am happy to say that for Bally, travel retail is not just an image-building channel, but is a true revenue-generating sector.”

Over the last two years, Bally has seen double-digit growth in travel retail and is now in 84 travel retail locations in 25 countries, 58 of which are in airports. Franchini is now hoping to upgrade these stores.

Bally has opened 17 travel retail doors in just the last two years, with plans for a further eight this year. The company will begin trading at airports in Mumbai, Abu Dhabi and Ho Chi Minh City. Bally’s travel retail business is already very strong in Switzerland, Asia and the UK and is now seeing encouraging growth in the Americas with new openings.


Bally took customers to the ultra-modern Villa Sacha, where Bally shoes were on display in museum-style glass cases

Spring/Summer 09 collections

Bally used its suite in Cannes to show off its product innovations for Spring/Summer 09 from Creative Director Brian Atwood. The product offering is aiming to become more contemporary and modern, focusing on the company’s signature qualities of high quality leathers and craftsmanship.

The Spring/Summer 09 women’s collection is inspired by a secret garden, where what can be found inside or underneath is just as important as the exterior, explains Atwood.

The key summer footwear style is sandals, flat or with a conical heel, with ties up the legs. In addition, platform shoes are designed to create a bold statement. Floral patent and soft suede T-bar shoes are fastened with covered buttons, while flats are simple and sporty.

New-season bags use ultra-light materials, and treatments include pleats, weaves and stitching. Ready-to-wear is described as modern romantic and urban, based on lingerie and lace, with ruffled chiffon blouses and dresses paired with tailored, structured high-waisted skirts, vests and jackets.

Atwood’s travels through South America inspired the Spring/Summer 09 men’s collection with natural, traditional, handwoven materials.

Shoes are the cornerstone, crafted in a rich earthy palette reflecting the colours of the desert, and feature loafers and moccasins in suede, espadrilles, woven leather sandals, flip-flops with micro rubber soles, and cowboy boots. Dress shoes come in oxfords, monk or brogue styles with a playful twist.

Travel-inspired bags for men include saddle bags, Victorian expedition bags, and weekenders and totes with detachable document pouches.



The major summer footwear style for women is sandals, flat or with a conical heel, along with floral patent and soft suede T-bar shoes. New-season bags use ultra-light materials, with treatments such as pleats, weaves and stitching



Men’s Spring/Summer 09 footwear styles consist of sandals, oxfords, monk and brogue styles with a playful twist, while the travel-inspired bags include Victorian expedition bags, weekenders and totes